Whether a recent college grad, newly married couple, or a family looking to downsize, most people ask themselves this question at least once in their lifetime - "should we rent or should we buy?" And the answer is so much more than the freedom to paint the walls. Let's compare renting vs buying.
Many people make buying out to be a "no-brainer" when the choice arises between renting vs buying a house. In some situations, it may be. But in others, it may not be. Like any other element of real estate, so much of it comes down to location.
According to the Zillow Breakeven Horizon, it takes 2.7 years for buying a Charlotte home to be more financially beneficial than renting. So you would have to live in the home for 2.7 years before selling for you to break-even the price of the purchase. Anything longer than 2.7 years would likely be advantageous for you. This number is drastically different in many other cities (i.e. Madison, CT takes 11.7 years).
But, location is not the only component to consider. There are many more factors to consider, including:
- Length of time you intend to live there
- How much loan you can you qualify for (determined by debt, income, credit history, job stability, and other various factors)
- How high taxes, insurance, mortgage insurance, and interest will be
- If you have the money for a down payment and to cover closing costs - the lower you have to put down up front, the more it will cost in the long run, and the less beneficial owning is.
Benefits of Owning
- Tax deduction - when filing taxes each year, there are typically significant tax deductions for owning a home
- Appreciation potential - your home may increase in value, allowing you to make $ when you sell
- Guard against inflation - as prices rise, rents will rise
- Storage and space
- And my favorite: remodel, update, customize, decorate any way you see fit
As you can infer, this decision is not as cut and dry as it seems. But, if you are going to buy, Charlotte is one of the best places to do so with such a low break-even index and an abundance of homes in various price ranges. Because there are so many factors to consider, the best thing to do would be to contact a Realtor® who can send you to a trusted lender to get some of those deciding factor questions answered (loan qualification, interest rates) and lead you to the right decision for your current circumstances.
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Visit First Time Buying for some simple information on the home buying process.